manufactured products. Dividends remaining uncalled for 6 months after the same have been declared shall revert to the association. (L. 1913, p. 53, § 13.)

1 This language precludes the power to issue preferred stock. See annotation to section 3905.

'For legal difficulties encountered by the Olympia Veneer Co. (organized under the general corporation law and engaged in manufacturing wood products) in distributing a "disproportionate" amount of its earnings as additional compensation to stockholder-employees, and in attempting to restrict the transfer of its stock, see Nichols v. Olympia Veneer Co., 135 Wash. 8, 236 Pac. 794 (1925); State ex rel. Howland v. Olympia Veneer Co., 138 Wash. 144, 244 Pac. 261 (1926); Nichols v. Olympia Veneer Co., 139 Wash. 305, 246 Pac. 941 (1926).

§ 3917. Distribution of dividends.-The profits or net earnings of such association shall be distributed to those entitled thereto at such time and in such manner not inconsistent with this act as its bylaws shall prescribe, which shall be as often as once a year. (L. 1913, p. 54, 8 14.)

§ 3918. Annual reports; contents; filing. Every association organized under the terms of this act shall, annually on or before the 1st day of March of each year, make a report to the secretary of state; such report shall contain the name of the company, its principal place of business in this State, and a general statement as to its business showing the total amount of business transacted, the amount of capital stock subscribed for and paid in, the number of stockholders, the total expenses of operation, the amount of its indebtedness or liability and its profits and losses. (L. 1913, p. 54, § 15; 1935 Supp., § 3918.)

§3919. Cooperative associations heretofore organized; may adopt provisions of this act.-All cooperative associations heretofore organized and doing business under prior statutes, or which have attempted to so organize and do business shall have the benefit of all the provisions of this act and be bound thereby on filing with the secretary of state [a declaration] signed and sworn to by the president and secretary, manager, or other officer managing said business, to the effect that said cooperative company or association has by a majority vote of its stockholders decided to accept the benefits of and to be bound by the provisions of this act. No association organized under this act shall be required to do or perform anything not specifically required herein in order to become an association or to continue its business as such.1 (L. 1913, p. 54, § 16.)

'The last sentence of this section exempts cooperatives organized under this statute from the annual corporation license tax. (Op. Atty. Gen. (1921-22) 24.) Note: This overrules the contrary view in Opinion Attorney General (1917-18) 219.

§ 3920. Use of term "cooperative" limited to associations under this act. No corporation or association organized or doing business for profit' in this State shall be entitled to use the term "cooperative" as a part of its corporate or other business name or title, unless it has complied with the provisions of this act; and any corporation or association violating the provisions of this section may be enjoined from doing business under such name at the instance of any stockholder or any association legally organized hereunder. (L. 1913, p. 55, § 17.)

1A nonprofit corporation does not come within the prohibition of this section. It may use the word "cooperative" in its name and need not organize under the cooperative statute. (Op. Atty. Gen. (1913-14) 511.)

§ 3921. When to do business; liability.-No cooperative association organized under the provisions of this act shall be permitted to do business until one-fourth of the capital stock of said association shall have been subscribed and paid into said association.' The liability of each stockholder shall be limited to the amount remaining unpaid on his subscription to the capital stock of said association. (L. 1913, p. 55, § 18; L. 1925, Ex. Sess. p. 150, § 3.)

1A cooperative which had failed to comply with this provision before commencing business was nevertheless held to be a "de facto" corporation, i. e., one which has failed to comply with all the organizational requirements but has done so sufficiently that no one but the State may question the legality of its organization. Therefore, a member who had entered into a contract with his cooperative could not avoid such contract on the ground that the company had no authority to execute it. (Washington Coop. Egg & Poultry Association v. Taylor, 122 Wash. 466, 210 Pac. 806 (1922).)

In another case, the court held that a member who kept his contract with an association for some 14 months could not subsequently assert its invalidity on the ground that the company had commenced business before complying with the provisions of this section. (Pierce County Coop. Ass'n. v. Templin, 124 Wash. 567, 215 Pac. 352 (1923).)

§ 3922. May pass bylaws. Any association formed under this act may pass bylaws to govern itself in the carrying out of the provisions of this act which are not inconsistent with the provisions of this act. (L. 1913, p. 55, § 19.)

§ 3923. Constitutionality. If any section or part of a section of this act shall for any cause be held unconstitutional such fact shall not affect the remainder of this act. (L. 1913, p. 55, § 20.)

WISCONSIN

1935 Statutes, Chapter 185

COOPERATIVE ASSOCIATIONS

§ 185.01. Definitions. In this chapter, unless the context or subject matter otherwise requires:

"Corporation" means a corporation not organized under this chapter.

"Association" means a corporation organized under this chapter. "Cooperative basis," as applied to a corporation means that:

(a) Each member has one vote and only one vote, (b) the rate of dividends upon stock is limited to 8 percent, (c) the net proceeds from the business of such corporation are distributed to the patrons in proportion to the volume of business transacted by said patrons with the corporation: Provided, That deductions may be made, as required or authorized by the law of this State, or, in the case of a foreign corporation, by the law of the State of such corporation's

creation.

2

"Net proceeds" mean the total proceeds minus expense of operation and cost of goods sold. (1921, ch. 490; 1923, ch. 291, § 3, ch. 433, § 1, ch. 449, § 59; 1927, ch. 534, § 84.)

1

1 Joint owners of stock in a cooperative can vote only as one member, and if they disagree on how to vote, the vote may be rejected by the cooperative. (11 Op. Atty. Gen. (1922) 853.)

'Patronage dividends may be distributed only by cooperatives organized under this statute and not by those organized under the general corporation law. (22 Op. Atty. Gen. (1933) 67.)

1

§ 185.02. Organization.-(1) Five or more resident adult persons may incorporate as an association for any purpose for which incorporation is authorized by section 180.01.*

(2) They shall sign and acknowledge written articles which shall comply with and be filed and recorded as required by section 180.02** except as otherwise provided in section 185.20. At least one officer of the association shall reside in this State, and the association shall keep its principal books of account and its stock books at its location.

(3) Only par value stock is authorized. The association, if it issues preferred stock, may provide, by contract with its members or patrons, for retaining, out of any money due from the association to said members or patrons, an amount sufficient to pay the dividends on and to retire such preferred stock. An amendment relating to preferred stock must be adopted by a vote of three-fourths of the holders of the preferred stock and three-fourths of the holders of the common stock.

(4) The articles, if the association is organized without capital stock, shall state whether the property rights of members shall be

equal or unequal, and if unequal, the rule by which their rights shall be determined. The provision relating to property rights shall not be amended or repealed, except by the vote of at least three-fourths of the members. (1887, ch. 126; 1907, ch. 411, ch. 562; 1911, ch. 368, ch. 664, § 57; 1919, ch. 371; 1921, ch. 490; 1923, ch. 291, § 3, ch. 433, § 1, ch. 449, § 59; 1927, ch. 534, § 85.)

*[§ 180.01. Who may incorporate; purposes of incorporation.-Three or more adult residents of this State may form a corporation in the manner provided in this chapter for any lawful business or purpose whatever, except banking, insurance and building or operating public railroads, but subject always to provisions elsewhere in the statutes relating to the organization of specified kinds or classes of corporations.]

**

*[§ 180.02. Articles.—(1) Contents. The persons desiring to form a corporation shall sign and acknowledge articles containing: (a) A declaration that they associate to form a corporation under these statutes, and of the business or purposes thereof.

(b) The name of such corporation, but such name shall not contain the names of individuals in the manner in which they are ordinarily used in partnership or business names, and shall be such as to distinguish it from any other domestic corporation and from any corporation licensed in this State. In case of reorganization, the name of the old corporation may be used.

(c) The location of such corporation in some city, village, or town in the State.

(d) The capital stock, if any, the number of shares and the amount "of each share.

(e) The designation of general officers and the number of directors, which shall not be less than three; and the directors may be required to be classified into three classes so that one-third shall hold their offices for 1 year, one-third for 2, and one-third for 3 years; in which case all directors elected subsequent to the first shall hold their offices for 3 years, except when elected or appointed to fill vacancies.

(f) The principal duties of each general officer.

8

The method and conditions upon which members shall be accepted, discharged, or expelled; and in stock corporations, persons holding stock, according to the regulations of the corporation, and they only, shall be members.

(h) Such other provisions, not inconsistent with law, as they may deem proper to be therein inserted.

(2) Filing and recording.-The original articles or a true copy thereof, verified as such by the affidavits of two of the signers thereof, shall be filed with the secretary of state. A like verified copy and certificate of the secretary of state, showing the date when such articles were filed by the secretary of state, within 30 days of such filing, shall be recorded by the register of deeds of the county in which such corporation is located, and no corporation shall, until such articles be left for record, have legal existence. register of deeds shall forthwith transmit to the secretary of state a certificate stating the time when such copy was recorded, and shall be entitled to a fee of 25 cents therefor, to be paid by the person presenting such papers for record. Upon the receipt of

The

such certificate the secretary of state shall issue a certificate of incorporation.

(3) Filing fees.-Filing fees shall be paid to the secretary of state as follows:

(a) By corporations organized for the manufacture of beet sugar, butter, cheese, or other dairy products, or for the business of preparing for market, storing, and selling products of the farms of members of the corporations, $10 for the articles and $5 for each amendment thereof.

(b) By every other corporation, except as is otherwise provided, $25 for the articles and $10 for each amendment thereof, and $1 for each $1,000 of its authorized capital stock in excess of $25,000. (c) By any corporation organized without capital stock, or exclusively for educational, benevolent, charitable, or reformatory purposes, the articles of which provide that no dividend or pecuniary profits shall be declared or paid to the members thereof, $5 for the articles and $2 for each amendment. No filing fee is required to be paid by a housing corporation formed under the provision of section 180.04.]

1

1A cooperative may be organized for transmitting electricity, but if it sells to the general public it is subject to the public utility statutes. (9 Op. Atty. Gen. (1920) 388.)

2

Where articles of incorporation have been filed with the secretary of state but not recorded with the register of deeds as required by section 180.02 (2), a cooperative has no legal existence and the secretary of state cannot require it to file an annual report, nor collect the penalty and publication fees for failing to file a report provided by section 185.18. (23 Op. Atty. Gen. (1934) 2.)

§ 185.03. [Repealed by L. 1927, ch. 534, sec. 86.]

§ 185.04. Filing fees. For filing the articles of incorporation of associations there shall be paid the secretary of state $10, and for filing an amendment to such articles, $5: Provided, That when the capital stock of such corporation shall be less than $500 such fee for filing either the articles of incorporation or amendments thereto shall be $1. An association shall pay a further filing fee of $1 for each $1,000 of its authorized capital stock in excess of $25,000. An association organized without capital stock shall pay a fee of $5 for filing articles of incorporation and $1 for filing an amendment. (1911, ch. 368, ch. 664, § 57; 1913, ch. 260; 1921, ch. 490; 1923, ch. 291, § 3; 1927, ch. 534, § 83.)

1

The filing fee for an amendment to articles of incorporation increasing the capital stock from less than $500 to more than $500, but less than $25,000, is $5, on the theory that as soon as the resolution for amendment is adopted the cooperative is out of the $1 class. (23 Op. Atty. Gen. (1934) 724; 3 Op. Atty. Gen. (1914) 163.)

In view of the principle laid down in section 185.20, the filing fee to be paid for an amendment to articles of incorporation is the amount provided by this section (185.04) and not that of section 180.02 (3) paragraph (b) of the general corporation law. This rule applies also to corporations organized under the general corporation law but operated on a cooperative basis, if the corporation has passed a resolution converting itself into a cooperative and amending its articles of incorporation. (22 Op. Atty. Gen. (1933) 982.)

§ 185.05. Board of directors; officers.-Every such association shall be managed by a board of not less than five directors. The directors shall be elected by the members of the association at such time and